I would like to believe that what Douglas says is true - that the equity curve is a traders personal psychological profile at the time, just like a bull flag in the daily is a markets psychological profile, a bullish formation in your equity curve means you are about to experience a set of strong winners.

I don't usually comment on writers or books. Your observation, however, is why I put little stock in what I read. This is so obviously someone who is more fascinated by the psychology of things than in the mechanics of trading. When I read his books, I felt like I was being lectured by a therapist. It just felt like he had little experience.

I have the responsibility of deciding how much size my traders can trade. I kept detailed trade by trade sheets (called lineouts), equity curves and other stats. Usually, when a trader starts pressing and his equity goes sideways to slightly down, I cut his size to take the fear out of his trading. Once he starts ramping up again, I allow more size and push to trade a bit bigger to take advantage of his/her flow.

If you go into a sideways pattern, then something is not quite there and the last thing I want to do is introduce more size (more fear) into the mix.

On the other hand, it may work for others, but I like to err on the side of prudence.